State Bank of India - Technofunda | Globe Capital Market LTD.
State Bank of India – Technofunda

At the CMP of Rs 446, the stock is trading P/BV multiple of 1.5x which looks reasonable valuation.

Overview and Recommendation


At the CMP of Rs 446, the stock is trading P/BV multiple of 1.5x which looks reasonable valuation.


State Bank of India (SBI) a Fortune 500 company, is an Indian Multinational, Public Sector Banking and Financial services statutory body headquartered in Mumbai. The rich heritage and legacy of over 200 years, accredits SBI as the most trusted Bank by Indians through generations. SBI, the largest Indian Bank with 1/4th market share, serves over 44 crore customers through its vast network of over 22,000 branches, 58,500 ATMs, 66,000 BC outlets.

Key Triggers:

Strong Q4FY21 Earning performance – SBI Q4 net profit jumps 80% YoY to Rs 6,451 crore on lower provisioning as compare to previous year’s profit of Rs 3,580.8 crore. On a quarterly basis, the bottom line expanded 24.14%. During the quarter its provisions and contingency fund dropped 18.11 per cent year- on-year (YoY) to Rs 11,051 crore, of which provision for NPA was Rs 9,914.23 crore, from Rs 13,495 crore set aside in Q4FY20.

Net interest income (NII) – the lender’s main source of income increased to Rs 27,067 crore during the quarter. SBI’s NII in Q4FY20 was Rs 22,766.9 crore, and Rs 28,819.9 crore in Q3FY21

Domestic NIM for FY21 was at 3.26%, up 7 bps YoY. Net NPA, on the other hand, stood at Rs 36,809.72 crore, up from Rs 29,031.72 crore in Q3FY21. The same declined from Rs 51,871 crore reported in Q4FY20. NNPA for the quarter came in at 1.5%, up from 1.23% QoQ.

Expected Value unlocking from Subsidiaries – It has several

unlisted subsidiaries like SBI Asset Management Company, SBI Asset Management company, SBI General Insurance & SBI Merchant Banking etc

Valuation & View:

At the CMP of Rs 446, the stock is trading P/BV multiple of 1.5x which looks reasonable valuation.

Key Risk

Increased provisioning & NPAs may reduce profitability

Technical View:

SBIN is one of the biggest PSU bank in India. It is trading in Higher – Highs and Higher – Lows formation above its long term as well as short term moving averages on daily charts. It has been trading in a congestion zone (400-442 levels) for past one month. On Aug 3, 2021, It has witnessed bullish breakout from the above mentioned congestion zone.

Going ahead, we expect it to continue its northward journey. Hence, we suggest to go lsong in SBIN as we expect it test 530 levels in near term.


Considering both the factors fundamental & technical parameter, we recommend a ‘BUY’ in SBIN at current level for the target price of Rs. 530 with close below stop loss of Rs. 408.


Globe Capital Market Limited (“GCML”) is a Stock Broker registered with BSE, NSE, USE and MSEI in all the major segments viz. Capital, F & O and CDS segments. GCML is also a Depository Participant and registered with both the Depositories viz. CDSL and NSDL. Further, GCML is a SEBI registered Portfolio Manager. GCML includes subsidiaries, group and associate companies, promoters, directors, employees and affiliates.

Globe Commodities Limited, Globe Derivatives and Securities Limited & Globe Fincap Limited are subsidiaries of GCML. Rolex Finvest Private Limited, A to Z Consultants Private Limited, A to Z Venture Capital Limited, M. Agarwal Stock Brokers Private Limited, A M Share Brokers Private Limited, Shri Adinath Advertising Company Pvt. Ltd., Orient Landbase Private Limited, Bolt Synthetic Private Limited, Price ponder Private Limited and Lakshya Impex Private Limited  are associates of GCML. Globe Comex International DMCC is step down subsidiary of GCML.

This report has been prepared by GCML and published in accordance with the provisions of Regulation 19 of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014, for use by the recipient as information only and is not for general circulation or public distribution. This report is not to be altered, transmitted, reproduced, copied, redistributed, uploaded, published or made available to others, in any form, in whole or in part, for any purpose without prior written permission from GCML. The projections and the forecasts described in this report are based on estimates and assumptions and are inherently subject to significant uncertainties and contingencies. Projections and forecasts are necessarily speculative in nature, and it can be expected that one or more of the estimates on which the projections are forecasts were based may not materialize or may vary significantly from actual results and such variations will likely increase over the period of time. This report should not be construed as an offer to sell or the solicitation of an offer to buy, purchase or subscribe to any securities, and neither this report nor anything contained therein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. It does not constitute a personal recommendation or take into account the particular investment objective, financial situation or needs of any individual in particular. The research analysts of GCML have adhered to the code of conduct under Regulation 24 (2) of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. The recipients of this report must make their own investment decisions, based on their own investment objectives, financial situation or needs and other factors. The recipients should consider and independently evaluate whether it is suitable for its/ his/ her/their particular circumstances and if necessary, seek professional / financial advice as there is substantial risk of loss. GCML does not take any responsibility thereof.

Any such recipient shall be responsible for conducting his/her/its/their own investigation and analysis of the information contained or referred to in this report and of evaluating the merits and risks involved in securities forming the subject matter of this report. The price and value of the investment referred to in this report and income from them may go up as well as down, and investors may realize profit/loss on their investments. Past performance is not a guide for future performance. Actual results may differ materially from those set forth in the projection.

This report has been prepared by GCML based on the information available in the public domain and other public sources believed to be reliable. Though utmost care has been taken to ensure its accuracy and completeness, no representation or warranty, express or implied is made by GCML that such information is accurate or complete and/or is independently verified. The contents of this report represent the assumptions and projections of GCML and GCML does not guarantee the accuracy or reliability of any projection, assurances or advice made herein. Nothing in this report constitutes investment, legal, accounting and/or tax advice or a representation that any investment or strategy is suitable or appropriate to recipients’ specific circumstances.

Since GCML or its associates are engaged in various financial activities, they might have financial interest or beneficial ownership in various companies including subject company/companies mentioned in the report. GCML or its associates have not received any compensation for investment banking or merchant banking from the subject company in the past 12 months.  GCML or its associates might have received any compensation including brokerage services and for products or services other than investment banking or merchant banking from the subject company in the past 12 months. It is confirmed that GCML or research analyst or its associates have not managed or co-managed public offering of securities for the subject company in the past 12 months.

Research analyst or GCML or its relatives’/associates’ have no material conflict of interest at the time of publication of this report. Neither research analyst nor GCML are engaged in market making activity for the subject company. It is confirmed that research analysts do not serve as an officer, director or employee of the subject company. It is also confirmed that research analyst have not received any compensation from the subject company in the past 12 months.

No material disciplinary action has been taken on GCML by any regulatory authority impacting Equity Research Analysis activities.

The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. This information is subject to change, as per applicable law, without any prior notice. GCML reserves the right to make modifications and alternations to this statement, as may be required, from time to time.

Research analyst or GCML or its relatives’/associates’ do not have actual/beneficial ownership of 1% or more in securities of the subject company, at the end of the month immediately preceding the date of publication of the document.